Forecast: May sales exceeded our monthly forecastby 4 units. The year-to-date sales forecast through May projected 286 closed transactions while the actual sales were 278 units, a 2.8 percent variance within the margin of error.

View full sizeGadsden area residential sales improved 31% in May from last year. Housing Inventory now down 9% from its May 2004 peak. Infograph courtesy of ACRE. All rights reserved.

Supply: Gadsden area housing inventory totaled 782 units, an increase of 6.1 percent from May 2013. May inventory decreased 1.0 percent from the prior month. This direction is consistent with historical data that indicates May inventory on average ('09-'13) typically decreases from the month of April by .4 percent. Inventory levels remain above normal, a trend that needs to continue to reverse as the market moves forward but is beginning to make significant favorable (lowering) progress. The inventory-to-sales ratio in May remains higher than desired at 10.9 months of housing supply. Restated, at the May sales pace, it would take 10.9 months to absorb the current inventory for sale. The market equilibrium (balance between supply and demand) is considered to be approximately 6 months during the month of May so this represents an area where continued improvement would be welcome news.

Demand: May residential sales were 18.0 percent higher than the prior month. Residential sales are seasonal typically increasing from April to May. Gadsden's historical data indicates that May sales on average ('09-'13) typically increase from the month of April by 6.0 percent.

Pricing: The Gadsden area median selling price in May was $98,000, a decrease of 1.0 percent from last May ($99,000). In contrast, the May median price improved 15.3 percent when compared to the prior month. This direction is consistent with historical data ('09-'13) indicating that the May median selling price typically increases from the month of April by 6.3 percent. Pricing can fluctuate from month-to-month as the sample size of data (closed transactions) is subject to seasonal buying patterns so a broader lens as to pricing trends is appropriate and we recommend contacting a local real estate professional for additional market pricing information.

Industry Perspective: "One consistently clear leading indicator for future home sales has been jobs. Simply, more jobs mean more home sales" expresses Lawrence Yun, Chief Economist of the National Associations of REALTORS in this State Employment Job Growth Blog published June 3rd. As outlined in the analysis, Alabama's gradual but less than robust job growth is consistent with home sales posted thus far in 2014.